Working Paper: NBER ID: w4219
Authors: Paul Krugman
Abstract: Any interesting model of economic geography must involve a tension between "centripetal" forces that tend to produce agglomerations and "centrifugal" forces that tend to pull them apart. This paper explores one such model, and shows that the model links together a number of themes in the geography literature. These include: the role of market access, as measured by a measure of "market potential", in determining manufacturing location; the role of forward and backward linkages in producing agglomerations; the potential for "catastrophes", i.e., discontinuous changes in location in response to small changes in exogenous variables: and the idea that the economy is a "self-organizing system" that evolves a self-sustaining locational structure.
Keywords: economic geography; agglomeration; market access; regional economics
JEL Codes: R12; F12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| market access (L17) | manufacturing location (L69) |
| manufacturing location (L69) | market access (L17) |
| backward linkages (L14) | agglomeration (R11) |
| forward linkages (L14) | agglomeration (R11) |
| exogenous variables (C51) | location shifts (J62) |
| centripetal and centrifugal forces (F29) | locational structure (R30) |